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Mobile Data Usage Off the Charts, Approaching a Exabyte

Mobile Data Usage Off the Charts, Approaching a Exabyte

MOBILESPACE—For anyone still doubting that the exchange of data across mobile networks is skyrocketing, reports about its latest growth trends should put the silly notion to rest. According to mobile network analyst Chetan Sharma, U.S. mobile data traffic will exceed 1 exabyte—or 1 billion gigabytes—before the end of the year.

Growth was across the board.

“The US wireless data market grew 7 percent Q/Q and 25 percent Y/Y to exceed $14B in mobile data service revenues in Q3 2010—on track to meet (and most likely exceed) our initial estimate of $54B for the year,” wrote Sharma on his website, adding that carriers were seeing related revenue spikes, as well.  

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“Sprint had a second straight positive net-add quarter. T-Mobile also reversed its losses and had a net-positive quarter though postpaid additions were down for both the carriers. 2011 is shaping up to be an interesting year with some big M&As on the cards. The launch of 4G networks provides an opportunity to realign the industry.” AT&T and Verizon, he added, now account for 70 percent of the market data services revenues and 62 percent of the subscription base.

Smartphones and tablets are leading the charge, especially the iPad, which continues to dominate the market. In fact, revenue from wireless data has doubled in the three years since the launch of the iPhone in 2007, when mobile companies reaped a staggering $25 billion from wireless data alone.

“In the connected device category, tablets led almost singlehandedly by the iPad is taking away the lion share of the revenues. The whole category is catching up speed in the US with 12 percent growth Q/Q much higher than in the postpaid segment which has trickled down to 1 percent Q/Q growth by Q3 2010,” wrote Sharma, adding, “We expect that in less than 5 years, the connected devices category will generate more revenue for the operators than the entire prepaid segment in the US. While today, connected devices represent only 3 percent of the quarterly data revenues, this segment didn’t really exist a few months ago and will keep on gaining strength every year for the foreseeable future.”

Most of the growth will be as a result of changing demographis, according to Sharma.

Kids of the now generation are growing with connected electronics that is fundamentally altering the behaviors and expectations of interaction, communication, consumption, and monetization,” he said.

As traffic grows, however, carriers are continuing to modify subscription plans to account for the fact that mobile data traffic keeps on growing disproportional to its revenues. The modification of plans will only continue, predicted Sharma.

“As we had forecasted, “he wrote, “the tiered pricing structure for mobile broadband expanded further with Verizon and T-Mobile following AT&T in deploying policy management strategies for controlling data margins. We will see the pricing evolve over the next 2-4 quarters as the US mobile ecosystem adjusts to the new realities and strategies for mobile data consumption.

For more information, visit Chetan Sharma’s website.






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